Vingroup, Vietnam's largest conglomerate, is exploring a private placement of three-year notes to raise as much as ₩400 billion in South Korea. This move comes as the company seeks to diversify its funding currencies and reduce borrowing costs, with domestic Vietnamese rates having surged recently. Shinhan Securities' Vietnam unit is leading the deal, with KB Securities and Kiwoom Securities expected to underwrite the notes.
The decision to tap the South Korean bond market is driven by significant cost savings. Vingroup would face interest rates close to 10% for a three-year corporate bond issuance in Vietnam, according to the Vietnam Securities Depository and Clearing Corporation (VSDC). Issuing in South Korea is projected to cut this cost by roughly one percentage point, making it a more attractive option.
This strategy is part of a broader trend where foreign companies are turning to South Korea's bond market due to increasing global interest rates and the demand for advanced Asian currencies as a hedge. Even U.S. tech giant Meta is reportedly considering won-denominated bonds to find alternative routes for lower funding costs, as local institutions become wary of large-scale dollar bond sales. However, challenges such as filing disclosure documents in Korean remain for foreign issuers.
